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Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2014. As of that date, Abernethy has the following trial balance: Debit Credit
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2014. As of that date, Abernethy has the following trial balance: Debit Credit 50,000 Accounts payable 40,000 Accounts receivable 50,000 Additional paid-in capital 120,000 Buildings (net) (4-year life) 60,000 Cash and short-term investments 250,000 Common Stock 200,000 Equipment (net) (5-year life) 90,000 Inventory 80,000 Land 150,000 100,000 Supplies 10,000 Totals $600,000 $600,000 During 2014, Abernethy reported net income of$80,000 while declaring and paying dividends of $10,000. During 2015, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000. Assume that Chapman Company acquired Abernethy's common stock by paying $520,000 in cash. All of Abernethy's accounts are estimated to have a fair value approximately equal to present book values. Chapman uses the partial equity method to account for its investment. Prepare consolidation worksheet entries for December 31,2014, and December 31, 2015. (lf no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Date Consolidating Entries Debit Credit (1) Prepare entry S. December 31, 2014
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